ED Transfers Defaulted Student Loan Collection Responsibilities to Treasury
Ryan Quinn
March 19, 2026
The Education Department says its latest move to distribute its duties to other federal agencies will include Treasury taking on much more student financial aid oversight in the future.
With roughly nine million student borrowers in default, the Treasury Department will “assume operational responsibility for collecting” on those loans, the Education Department announced Thursday.
The move is ED’s latest effort to render itself obsolete as part of the Trump administration’s plan to eliminate the department. This is the 10th interagency agreement it has signed to share with or spin off functions to other federal agencies.
But the ultimate scope of the agreement with Treasury isn’t immediately clear. Officials outlined a three-part plan to shift most non-policy-related responsibilities over the $1.7 trillion student loan portfolio to Treasury “to the extent practicable and permitted by law,” but the timing of the second and third phases wasn’t specified. For now, Treasury is just taking over debt collections on defaulted loans.
